EU's Barnier Seeks 'Political Will' On Bank Union

The European Union Commissioner called for more support for a banking union from European finance ministers in a recent interview.

European Union Commissioner
Michel Barnier called on the bloc's finance ministers to dispel
doubts about their "political will" to create a single bank
supervisor, the Financial Times reported on Monday.

In an interview with the newspaper, the commissioner also
expressed support for a cap on bankers' bonuses, criticized a
voting system favored by the United Kingdom and suggested EU
law could eventually be changed to strengthen the banking union.

Ahead of a meeting of European finance ministers next week,
which will test the likelihood of a deal on banking union being
struck by the end of the year, Barnier emphasized the importance
of reassuring the "fragile" markets.

"Now is the time to decide," the commissioner said. "We need
to meet a deadline set by the heads of state. We need
a political decision and that is possible."

Some negotiators involved in talks over a proposed banking
union, which have stalled in recent weeks, expect the year-end
deadline to be missed.

"The markets are not complacent. They remain vigilant and
watchful. ... We need to deliver now."

Barnier also offered a solution to the thorny issue of
bankers' pay, suggesting a "maximum cap" which could be
adjusted, within a set range, by shareholders.

"Banks need to pay attention. They are part of society, they
are not outside of society," he said.

The French commissioner opposed UK demands for a so-called
"double majority" at the European Banking Authority - whereby
there must be a minimum of non-banking union votes in any
decision - on the grounds it could lead to "fragmentation".

"The EBA is a body that works for the coherence of the
single market. ... A double majority could indeed establish a
fragmentation," he said. "We can work on better systems than
double majority."

Any deal to establish a Europe-wide banking supervisor would
have to be made on the basis of "good solutions in the existing
treaties", Barnier said.

But he added that EU law could be changed in the future to
accommodate the union better.

"Maybe we can imagine that later on we can consolidate
things, improve things," he said.